Every business has several different aspects. It has tangible and physical aspects such as the business office premises, machinery, people, products, and it has intangible aspects such as business models, concepts, intellectual properties and much more. The physical aspects of the business are key to the smooth functioning and the operations of a business. In this blog, we look at key insurances that can ensure a smooth recovery from physical mishaps.
1. Fire Insurance
Most often small businesses work out of small office spaces or might have spaces, factories and warehouses that are small in comparison to large enterprises. This leads business owners to assume that they would not face any big losses. But imagine a fire caused due to a short circuit burning down the entire office. Would a small business be able to get back on its feet and resume business easily? A Fire and Special Perils insurance policy provides coverage for — fire, malicious damage, riots, explosions, impact damage and natural calamities.
2. Errors & Omissions
Errors & Omissions is also known as Professional Liability Insurance and Professional Indemnity Insurance. This insurance is most helpful to companies and contractors that offer services to customers. Lawyers, doctors, engineers, architects, business consultants, and designers are among the professionals that offer independent services and are in turn most liable for a breach of contract or missing deadlines or errors in services, etc. Thus, it is vital that these professionals possess an Errors & Omissions insurance which could give them adequate protection.
It is useful in the following scenarios:
- Breach of contract
- Contractual dishonored
- Negligence and error in service
- Legal costs, settlement and judgment
3. Directors & Officers Liability
The recent years have seen an increased number of claims of Directors and Officers Liability Insurance. Directors, officers and decision-making employees have more liabilities than a company as a whole has. In scenarios when the decision-making members of a company find themselves in the middle of a lawsuit against them, the D&O Liability Insurance can be extremely handy to rescue them out of a tight spot.
4. Workmen Compensation
Most companies and employers take precautionary measures to keep their employees safe and secure. However, mishaps can happen at any time because businesses face various kinds of risks. In the scenario when employees file legal suits against the company, the Workmen Compensation insurance can provide compensation to the company for the legal claims.
This insurance provides coverage under the provisions of the Workmen Compensation Act (1923) and Fatal Accidents Act (1855).
5. Keyman Insurance
Every organization is made of several employees but some employees are the backbone of the company. If something happens to these key employees, at times, a number of operations and systems can come to an abrupt halt. In certain cases, the entire business gets interrupted. This is when the Keyman Insurance is helpful to the small business.
This insurance is purchased by employers for an employee but the benefits are received by the employer to compensate for the losses and extra expenses incurred due to the absence of the key employee.
6. Factory/Warehouse Insurance
A number of small businesses operate out of factory and warehouse settings. For such businesses, it is essential to have a factory/warehouse insurance. It provides coverage for damages toward stock and inventory, furniture and fixtures, raw material and finished goods, the building and assets such as machinery.
7. Product Liability Insurance
Cyber risk is the most widespread risk to businesses today. With startups and small businesses being heavily dependent and focused on technology and the internet, these risks are increasing day by day. Cyber Risk Insurance provides coverage for the following:
It provides first party coverage such as data breach, expenses related to legal services, attorney fees and court charges, costs involved in crisis management, PR and losses due to business interruption caused by the cybercrime. It also provides third-party coverage related to legal costs and regulatory fees, costs related to loss of data of third-party and settlements and judgments.
8. Product Recall Insurance
Businesses that manufacture products, package, wholesale or retail products must have a Product Liability and Product Recall Insurance plan. It covers the damages that a company would be legally liable to pay to the third party due to accidental death or bodily injury or property damage arising out of a faulty or damaged product.
9. Business Interruption Insurance
Businesses, at times, could face interruptions due to a number of reasons. Natural calamities, a machinery breakdown or a cyber attack on the system — there can be a number of incidents that can bring a temporary halt to the business. In such times, the loss of income and expenses (relocation, extra rental) incurred can be compensated by Business Interruption Insurance.
10. Industrial All Risk Insurance
The Industrial All Risk Insurance is a comprehensive plan that provides coverage to industrial property towards unforeseen circumstances. Even a minor accident or a machinery breakdown can cause huge damages to a business. This policy covers risks that are excluded from property and fire insurance. It covers damage to assets and business interruption losses and expenses. It also allows for extensions that can cover incidents like terrorism, earthquakes and others that aren’t covered by other insurance plans.
11. Office Package
A lot of businesses prefer purchasing one umbrella policy in order to protect different aspects of the business. The Office Package policy is one such plan. It provides coverage for damages to the office building, furniture, machinery, fixtures, legal claims to third-parties, among other coverages. For small businesses that are not directly vulnerable to risks, the Office Package Compact Policy can be helpful in times of sudden mishaps and events.
For small businesses and startups, it is important to plan and prepare for unforeseen risks that could cause interruptions to the business. Some incidents might derail the business activities to such an extent that it may be impossible for the business to get back to where it was without the help of insurance coverage. PlanCover can guide you to plan your business and industry specific insurance requirements. Get in touch.